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China Sets 5% Economic Growth Target for 2024

China officially unveiled a 5 percent GDP growth target for 2024, which is the same as 2023’s goal and in line with analysts’ expectations.

In 2023, China’s economy expanded 5.2 percent, falling short of Beijing’s 5.5 percent goal.

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The target was unveiled during the highly anticipated “Two Sessions” meetings that opened in Beijing on Tuesday.

“Two Sessions,” which stands for concurrent annual meetings of the National People’s Congress and the Chinese People’s Political Consultative Conference, usually lasts a week and outlines economic and policy strategies for the current year.

Other key economic figures, including the fiscal budget deficit, inflation target and jobless rates, were also unveiled during the opening meeting of “Two Sessions.”

Delivering his first government work report as Chinese Premier, Li Qiang unveiled that China will target a 3 percent budget deficit, lower than last year’s 3.8 percent.

The inflation target remains unchanged at 3 percent. The unemployment rate also remained unchanged at 5.5 percent, with plans to create 12 million urban jobs in 2024.

To stimulate the economy, Beijing plans to issue 1 trillion renminbi, or $138.9 billion, of ultra-long special central government bonds to alleviate private enterprise woes.

“The optimistic tone of the work report will hopefully inspire market confidence, and we expect economic conditions to improve significantly in the second half of the year as specific initiatives unfold,” said Dan Liu, chief economist at Hang Seng Bank China. The economic structure will continue to segue into one focused on high-tech and green economy.”

As detailed by the work report, China’s target for tech research and development will increase 10 percent year-over-year to reach 370.8 billion renminbi, or $51.5 billion. A 2.5 percent decline in energy consumption per unit of GDP will be 2024’s target.

This year’s moderate economic growth target has set “a bottom line” for policymakers, according to Zhaopeng Xing, senior China strategist at ANZ Bank New Zealand.

“It is well known that China will need at least 4.7 percent annual GDP growth to double its per capita GDP by 2035. So the target of 5 percent will likely be a bottom line for policymakers,” wrote Xing in a memo. “To achieve 5 percent GDP growth, the economy will need more stimulus in 2024.”

“The property sector will likely remain a prolonged drag on growth,” added Lynn Song, chief economist of Greater China at ING. “But we do not see it boiling over into a full-blown crisis.”

On the consumption front, Song said that weak consumer confidence and asset depreciation will lead to a theme of “eat, drink and play” for the year.

“Food and beverages, entertainment, and travel and tourism sector” may continue to outperform this year, Song added.

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